As cloud suppliers continue to grow their footprint in the IoT value chain, their investments in data and analytics services are accelerating. Based on the review of cloud vendor offerings, recent acquisitions, and competitive outlook, ABI Research forecasts that cloud suppliers will grow their share of IoT data and analytics management revenues from US$6 billion in 2019 to US$56 billion in 2026.
Companies are using more data for faster results, often in real time, and cloud vendors are looking to provide the infrastructure, software, and services to support these data-centric models. As a result, some dominant key trends have emerged.
Cloud Vendors are Building All-in IoT Tech Stacks
Vendors are expanding their capabilities to cover connectivity and message routing, device management, registry and connectivity, data management and storage (batch processing), data processing, and streaming (real or in near real time), event management, analytics, and application enablement. Considering that the current competitive landscape consists of more than 400 IoT platforms, most of which are cloud-native, the capabilities of AWS, IBM, Microsoft, GE, and others to build a full-stack technology pipeline will favor the top cloud vendors. While smaller companies are looking for a niche technology to ensure a competitive advantage, the large cloud vendors can leverage extensive computing power and infrastructure to provide services and fully-managed applications.
Partner Ecosystem over Technology Offering
The tight competition between vendors for IoT analytics goes beyond the technology and speed they can offer, as cloud vendors’ point of differentiation on IoT analytics is very marginal, due to similarity of the offered toolsets. However, cloud vendors are more focused on leveraging ecosystems and partnerships as points of differentiation to various verticals. The “partnership” and “coopetition” trend is relative, as cloud vendors can offer openness, scalability, security, strength/stability, potentially support of specific regulatory requirements, viability, and a good old pricing strategy. Meanwhile, software builders and vast IoT ecosystem companies are leveraging their niche capabilities supported by cloud vendors' umbrellas.
Niche Is Becoming More Niche
Cloud vendors are aggressively entering IoT analytics and IoT data management space by offering the end-to-end solutions, as well as other solution components, such as applications and application development. The smaller vendors and software developers’ companies are competing for “more than just niche” markets. Smaller companies do not have the ability to leverage infrastructure, computing power, or far greater levels of human equity, so they are differentiating themselves on the core expertise of an industry or providing services for a specific value chain component.
Real-Time Data Are the Data Enterprises Can Monetize
Continuous data stream, or so-called real time streaming is a new trendy feature for IoT analytics. It departs from a data-at-rest ecosystem to data-in-motion computing, combined with business operation and custom Key Performance Indicators (KPIs), which allows businesses to make an operational decision in near real-time. Additionally, the trend for real-time analytics can provide a strong impetus for prescriptive analytics in the near future. In the meantime, such operational capabilities allow enterprises to seamlessly make changes and optimize operations, using real-time data and streaming analytics. It is a fair observation that, since 2016, most large cloud vendors have been heavily investing in streaming technology.
Streaming is the one analytics technology that all cloud vendors are building into their solution portfolios to blend data management with near-real-time analytics on streamed IoT data. AWS, Microsoft, Google, IBM, and Oracle, for example, are promoting their proprietary streaming solutions to differentiate, accelerate time-to-market, and win over customers. In contrast, companies like Cloudera, Teradata, and C3.ai are introducing streaming analytics services heavily reliant on open source technology, such as Spark and Flink.
The Landscape Ahead
Despite the lack of amalgamation of the cloud-native IoT analytics market, there are two emerging leaders, AWS and Microsoft, predominantly due to their capacity to leverage IaaS, consolidated cloud-storage offerings, and vast ecosystems of partnerships. In retrospect, the name of the game is “consolidation” of the AWS and Microsoft dominance, as they are expected to be leading the pack. The analytics space is new and emerging, and the key to success is leveraging the partnership and software capabilities on cloud-native platforms, which are IoT relevant.